Agencies can't count the savings in consolidation push

While agency IT officials are realizing tangible benefits from data center consolidation, they are having a hard time demonstrating cost savings, according to federal IT professionals surveyed in a new report by MeriTalk. And only half of them think the federal government will hit its goal of closing 1,200 data centers by 2015.

The struggle continues

Federal agencies are making data center consolidation progress but are unsure if they will meet the 2015 goal of closing 1,200 data centers, according to a MeriTalk study. The study found that:

71 percent say their agencies have closed data centers; on average, each of those agencies has closed 31 centers.

32 percent of agencies report quantifiable cost savings.

50 percent think agencies are on track to meet the FDCCI goal of closing 1,200 data centers by 2015.

The challenges they have to overcome include finding money for consolidation, overcoming the objections of agency mission-owners, application consolidation and security, the report states.

Agencies are about halfway to the 2015 goal of closing 1,200 data centers set by the Federal Data Center Consolidation Initiative launched by the Office of Management and Budget in 2010. And IT managers are seeing real benefits, including better use of IT staff (60 percent), reduced energy consumption (57 percent) and increased use of more efficient computing platforms (47 percent), the report, “The FDCCI Big Squeeze,” reveals.

Nearly three out of four (71 percent) of the federal IT professionals surveyed say their agencies have closed data centers as part of FDCCI. These same respondents estimate that an average of 31 data centers per agency have been shut down, according to the study, which surveyed 66 federal IT pros and was underwritten by storage vendor NetApp.

OMB reports that agencies have made significant strides consolidating data centers to date, closing 420 centers as of February 2013, according to a March 27 memo. To help monitor consolidation goals, OMB integrated FDCCI more closely with PortfolioStat, a program introduced in March 2012 to help the government scrutinize an agency’s entire IT portfolio with an eye toward eliminating duplicative IT services.

Still, consolidation is not without challenges. More than half, or 56 percent, of the IT professionals surveyed graded their agency’s consolidation efforts at “C” or below. And only 50 percent of IT managers surveyed think the government is on target to close 1,200 data centers by 2015. Despite reporting real benefits as a result of consolidation, only 32 percent of agencies report quantifiable cost savings.

Other industry experts in recent months have acknowledged that data center consolidation and optimization efforts are under way, but the process appears to be moving at a snail’s pace. And some doubt the government will meet the goal of shuttering about 40 percent of the nearly 2,900 targeted facilities by the end of 2015. Data center consolidation efforts are “either going slowly or stalled because the government is trying to figure out what their budget situation is, or how much money they have to spend,” Anthony Robbins, vice president of federal sales at Brocade, a developer of network solutions that help organizations move to virtual environments, said in a November 2012 interview.

Not surprisingly, finding the budget for consolidation is cited by 48 percent of the IT professionals surveyed as one of the primary challenges to achieving success with federal data center consolidation. Other challenges include overcoming mission-owner objections (45 percent), shutting down or consolidating applications (33 percent), security issues (18 percent) and completing data center inventories (15 percent).

The respondents cited the Defense and Homeland Security departments and National Oceanic and Atmospheric Administration as the agencies doing the best job of consolidating data centers, making them role models for other agencies. The report recommends that the government showcase agencies that meet FDCCI checkpoints and encourage others to comply. Better tools must be developed to demonstrate consolidation cost savings, the report states. Plus, cost-savings numbers should be shared with agency mission owners to give them a better understanding of how data center consolidation can benefit them.

“Data center consolidation benefits are real, but federal CIOs need more and better tools to help draw a clear, direct line between cost savings from consolidation and payback to mission owners,” Mark Weber, president of NetApp’s U.S. Public Sector, said in a statement.

Reaping real savings from the consolidation effort will require agencies to adopt new technologies, including unified computing and improved business analysis systems, to achieve a more meticulous accounting of costs, a sharper focus on cutting duplicative systems and a commitment to tapping shared services opportunities, according to government and industry executives involved in the consolidation drive interviewed by GCN.

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Reader Comments

Sat, Jun 15, 2013

Ya think!!?? This is funny! While a 3rd grader can see the anecdotal value of moving all your computing resources to a data center, the reality of the WAN cost getting to that data is hitting home. Because our congress is, well, our congress, they forgot to quintuple the agency budgets for WANs to make sure the non-paying customers see little or no difference when all their data is moved. At my agency we're stuck with the twinkle-eyed DC folks preaching the benefits of DCs and the rest of the top brass wanting all the rest of the parts of the IT pie cut - including WAN costs. So, whatever's being saved by moving to DCs sure isn't having any of those saving invested in the WAN that enable them. So these DCs too will fail... Many are just as happy with that, who wants their data a two-day drive away?
Not everybody has the nearly unlimited budget that DoD appears to have, so I can't wait for the tide to shift back to decentralization.. Management of people and data processing centers too. And you might ask people to define closed DCs. "My" agency has opened DCs, but we have yet to turn the lights out at the locations where the applications moved to. So, a better question might be, "Has the former compputer room been turned into office space, the HVAC units moved out, the Room-level UPSs moved out, and them not just moved to a new room in the facility?" I'll bet not....

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